Should You Stop Saving to Repay a Loan or Credit Card?
When money is tight, it can feel like you have to choose: save money or pay off your debt.
Paying off borrowing sooner can mean paying less interest overall and becoming debt-free faster. But stopping your savings completely can leave you without money to fall back on when an unexpected expense comes along.
So, should you stop saving to repay a loan or credit card? Not always.
Should you save or pay off debt first?
There are good reasons to do both.
If you're paying interest on your debt, making extra repayments could help you pay less interest and clear your debt sooner.
But having some savings means you have money to fall back on if something unexpected happens.
Your car could break down. Your boiler could stop working. You could get an unexpected bill.
Without savings, you may have to use more credit to pay for it.
For some people, the answer may be to keep saving while paying off their debt.
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